Ceagro bonds sink on missed payment

NEW YORK, May 22 (IFR) - Brazilian commodities trading
company Ceagro's bonds fell multiple points on Friday after it
missed a payment on its outstanding 2016s.

The price on the 10.75% 2016, which was being quoted in the
90s earlier this week, has plummeted to around 20.00 after the
company said it failed to pay interest due on May 16.

"Due to significant losses resulting from adverse economic
conditions, coupled with the instability of recent harvests and
other unfavorable macro-economic issues, the Company decided to
restructure its activities," the company said in an email sent
Friday.

The company will suspend debt payments until a restructuring
with creditors is finalized, it said. Ceagro comes on the back
of a series of recent defaults in Brazil where borrowers have
been struggling to adjust to slowing economic growth and reduced
access to the credit markets.

"This is just one more example of where we are in the credit
cycle in Brazil, but it won't shake the ground in terms of
confidence," said a banker.

Standard & Poor's downgraded Ceagro to D from B late
Thursday, citing the missed payment on the 2016s and the
expectation that the restructuring process won't be completed
before the end of a unspecified grace period.

"Our recovery rating on the debt rating remains unchanged at
'3', indicating our expectation for meaningful (50% to 70%; in
the higher half of the range) recovery in the event of payment
default," said the agency.

Ceagro first sold US$100m of the 2016s in 2010 when it was
then rated BB-. The bonds, which carry a six-month debt service
reserve and offshore collection accounts, were priced at 98.965
to yield 11% through sole lead Jefferies.

The company embarked on a non-deal roadshow through Itau in
April last year, approaching accounts in London, but no deal
ever emerged.
(Reporting By Paul Kilby; editing by Shankar Ramakrishnan)